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TMI Blog2021 (11) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... aking the proper inquiry relating to the property in question accepted the explanation. Therefore, it cannot be said that the A.O. failed to make the proper inquiries while accepting the explanation given by the assessee. Pr. CIT considered the value mentioned in the agreement to sell which was not acted upon and nothing was brought on record that the amount stated in the agreement was paid for the sale. On the contrary the amount mentioned in the sale deed was paid through Demand Draft and was accepted as correct in the case of another co-owners also by the A.O. while framing the assessment under section 143(3) r.w.s 147 of the Act. Pr. CIT has taken the action merely on the basis of the audit objection while the A.O. made the proper inquiries in depth at the time of framing the assessment under section 143(3) r.w.s 147 of the Act. Therefore the impugned order passed by the Ld. Pr. CIT is not maintainable, accordingly the same deserves to be quashed.Department has accepted the value of the property in the cases of two co-owners while the value of the same property in the hands of the 3rd co-owner i.e; the assessee was doubted. Therefore in view of the principle of consistency also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see earned commission income besides having other sources income. (ii) All the replies, information and documents submitted by the assessee have been considered with reference to the facts of the case and returned income of the assessee is accepted as such. 4.1 Thereafter the Ld. Pr. CIT, Panchkula exercised his revisionary power under section 263 of the Act any observed that the A.O. had completed the assessment in undue haste and without carrying out necessary and proper enquiries which he ought to have carried out, therefore, the order passed under section 143(3) r.w.s 147 of the Act appears to be erroneous and thus was prejudicial to the interest of the Revenue. The Ld. Pr. CIT issued the notice under section 263 of the Act and asked the assessee to show cause as to why the assessment for the A.Y. 2011-12 vide order dt. 28/12/2018 under section 143(3) r.w.s 147 of the Act should not be cancelled. The relevant portion of the notice under section 263 issued on 11/03/2021 read as under: "Your case was reopened u/s 147 for verification of source of investment for purchase of immovable property to the tune of ₹ 1,17,42,437/- as per agreement to sell whereas as per sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount and source of investment in property might have been determined and brought to tax. The reliance was placed on the decision of the Hon'ble Apex Court in the following case laws: • Malabar Industrial Co. Ltd. Vs. CIT reported in 243 ITR 83 (SC) • Rampyari Devi Sarogi Vs. CIT reported in 67 ITR 84 (SC) • Smt. Tara Devi Aggarwal Vs. CIT reported in 88 ITR 323 (SC) 4.3 Accordingly the assessment order passed by the A.O. on 28/12/2018 under section 143(3) r.w.s 147 of the Act for the A.Y. 2011-12 was cancelled with the direction to the A.O. to pass an order afresh in accordance with law after affording due and reasonable opportunity of being heard to the assessee. 5. Being aggrieved the assessee is in appeal. 6. The Ld. Counsel for the assessee submitted that the assessee had purchased an agriculture land measuring 44 Kanal 11 Marla for ₹ 60,00,000/- on 23/12/2010 and all the payments were made through cheques, reference was made to page no. 18 to 22 of the assessee's compilation which is the copy of sale deed. It was further submitted that the A.O. came in possession of an alleged agreement to sell dt. 10/09/2010 for agriculture land measuring 133 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee had not submitted any reply during the assessment proceedings, contrary to the facts on record that the assessee furnished detailed reply to the A.O. 6.3 It was further submitted that although the Ld. Pr. CIT observed that the A.O. should have conducted detailed inquiries, however, he himself had not conducted any inquiry before passing the order under section 263 of the Act which is contrary to the settled judicial precedent on the issue. Moreover it is a case where the Ld. CIT (Audit) has raised audit objections which were replied by the A.O. objecting the objection and when CIT (Audit) did not settle the objection the same resulted in action under section 263 of the Act. Therefore the action of the Ld. Pr. CIT was not justified in directing the A.O. to make further inquiry and to frame the assessment again. The reliance was placed on the following case laws: • Vision Promoters And Builders (P) Ltd. Vs. CIT(Central) Gurgaon and DCIT Vs. Vision Promoters and Builders (P) Ltd. in ITA No. 401/Chd/2012 and ITA No. 483/Chd/2013 dt. 28/09/2017 (Chd Trib) • Westlife Development Ltd. (Successor to Wespoint Leisureparks Ltd.) Vs. Pr. CIT in ITA No. 688/Mum/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the A.O and there were three coowners, the value of the property in the hands of two co-owners had been accepted and no action was taken under section 263 of the Act while in assessee's case the Ld. Pr. CIT did not accept the value of the property which is against the principle of natural justice. 7. In his rival submissions the Ld. DR strongly supported the impugned order passed by the Ld. Pr. CIT and reiterated the observations made therein. 8. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case it is noticed that the assessment in the assessee's case was reopened on the basis of passing the information that the assessee purchased immovable property for ₹ 61,98,800/- as per registered deed while the same was valued at ₹ 1,17,42,437/- as per the agreement. The A.O. accepted the value while framing the assessment under section 143(3) r.w.s 147 of the Act after proper verification and the contention of the assessee that the agreement was only a photocopy and not an evidence. The Ld. Pr. CIT on the basis of the objections raised by the internal audit party invoked the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord. He has nowhere concluded that he has reason to believe that a particular income has escaped assessment. And moreover it is also placed on record that the assessment could only be reopened on the basis of any concealed income which has escaped assessment and not for any other income which may subsequently comes to the notice of the A.O. 5. That the reasons recorded are not specific and the A.O. has failed to identify the other two persons with whom the assessee has purchased the property. 6. That the approval accorded by the Approving Authority is also without application of mind and the approval has been accorded in a mechanical way. 7. That the copy of ikrarnama may be supplied. In the light of above facts it is requested that the proceedings initiated u/s 147/148 may be dropped as the proceedings are ab initio void, illegal and bad in law. 8.2 Thereafter the A.O. issued the notice under section 142(1) of the Act dt. 22/11/2018 which read asunder: Notice under Sub-Section (1) of Section 142 of the Income TAX Act. 1961 Sir/Madam/M/s, In connection with the assessment for the assessment year 2011-12 you are required to: a) Furnish or cause to be furnished on or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Kumar Aggarwal S/o Sh. Rajinder Kumar Aggarwal and Smt. Swati W/o Sh. Anish Kumar Aggarwal S/o Sh. Rajinder Kumar Aggarwal, R/o H.No. 938, Sector-7, U.E, Ambala City, it is found that the assessee alongwith others has made an agreement for purchase of immovable property @ ₹ 21,11,000/- per Acre and paid advance money through bank drafts. This agreement is duly signed by all the purchasers and sellers. Copy of Biana dated 10.09.2010 is enclosed herewith. The assessee has paid/given out the amount of ₹ 57,82,000/- (11782000-6000000) over and above sale consideration as per sale deed, dated 23.12.2010. In this connection, the assessee is show caused as to why an addition of ₹ 57,82,000/-- may not be made to the taxable income of the assessee. 3. Further, from the perusal of your reply, it is noticed that for purchase of immovable properties during the relevant year, you have raised/taken unsecured loans from the following persons:- S.No. Name of the person Amount of loan Dated 1 M/s S.S.Scripts Pvt. Limited ₹ 46,00,000/- 20.12.2010 2 M/s S.S. Scripts Pvt. Limited ₹ 17,00,000/- 10.09.2010 In this regard, you are requested to fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The only objection was taken to the assessment famed in the hands of the assessee under section 263 of the Act which is against the principle of consistency. 8.6 Moreover the A.O. after making the proper inquiry relating to the property in question accepted the explanation. Therefore, it cannot be said that the A.O. failed to make the proper inquiries while accepting the explanation given by the assessee. 8.7 On a similar issue the Hon'ble Kerala High Court in the case of CIT Vs. Smt. K.C. Agnes And Others (supra) held as under: "When a document shows a fixed price, there will be a presumption that that is the correct price agreed upon by the parties. It is not necessary that the price stated in the agreement will be the price shown in the sale deed. Sometimes, it may be higher and sometimes it may be lower. Sometimes intentionally a lesser value may be shown in the sale deed. Even if it is assumed to be so, unless it is proved that the agreement was acted upon and unless the amount stated in the agreement was paid for the sale, the court cannot come to the conclusion that the price mentioned in the sale deed is not correct." In the present case also the Ld. Pr. CIT consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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